“One can see a certain rebound in demand in Romania, but that comes from the private sector mostly. The ideal thing would be if it came from infrastructure sector, as well,” says Ileana Nicolae, who has been in charge of Sika’s Eastern European operations for more than a year.
Construction work volume rose by almost 12% in Romania in the first four months of the year compared with the same time in 2014, according to National Statistics Institute data. However, while residential and non-residential sectors did see growth, the engineering works (infrastructure) saw a 0.5% decline.
Ileana Nicolae supervises the operations of Sika in 18 countries, such as Austria, Poland, Russia, Romania and Serbia, which generate EUR400 million revenue and employ 900 people. The entire Sika group posted EUR4.5 billion revenue in 2014.
“I expect the construction sector to stagnate in Eastern Europe. The market is saturated, it is very hard to grow and one can only do it by boosting market share. Poland is the best, because the country has very big construction projects. Romania and Serbia each have a new Sika plant, and results are very good in these two countries, as well.”
Sika has an admixture plant in Brasov, which it inaugurated in 2008 and in 2013 opened a dry mortar production facility in Cluj County.
Sika Romania posted about 94 million lei (EUR21 million) revenue in 2014, an increase of 14% on 2013, according to Finance Ministry data.
“We expect a slight increase of our business this year,” Ileana Nicolae says.
The lack of cash and the capping of governmental investment allocations are the main challenges of the local construction industry but the good news for the Romanian economy is the decline in the number of insolvencies, she added. A number of 3,833 companies went insolvent in the first four months of the year, 57% fewer than in the year-ago period, according to the Trade Registry.
Ileana Nicolae says managers learnt during the crisis to no longer budget unsustainable figures, pay more attention to revenue, guarantees and contracts, as well as to cost control.
“We are no longer using the boom days, 2007-2008, as a reference, but more recent years, such as 2013 and 2014. Planning is no longer as long-term as it used to be, response has to be quick and one always has to have a Plan B. That is today’s normal.”
Sika’s product lines include concrete admixtures, specialty mortars, epoxies, structural strengthening systems, industrial flooring, sealants, and adhesives, specialty acoustic and reinforcing materials. Competitors include Henke, Mapei and BASF.
(English version by Loredana Fratila-Cristescu)